Overtrading and overcapitalisation

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April 20, 2021 at 3:28 am #618255
ilham9089
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Is it correct to say that in overtrading too much short term finance is used while in overcapitalisation too much long term finance is used?
April 20, 2021 at 6:34 am #618271
John Moffat
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Yes, although there is a lot more you would be expected to explain if you were to be asked a written part of a question about this (such as why they might occur and what problems might arise).
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